With the commencement of the 2024 tax season on January 27, millions of taxpayers are stepping into a critical financial period. As many eagerly anticipate refunds, the reliance on these payouts has never been more pronounced. A recent survey conducted by Credit Karma reveals that approximately 40% of individuals intend to use their tax refunds as an essential resource for making ends meet. The IRS has projected a staggering 140 million individual tax returns will be filed before the federal deadline of April 15. However, proper preparation is crucial to ensure a smooth filing process and maximize potential returns.
For those eager to file their taxes without incurring additional costs, several avenues are available in 2024. The IRS has expanded its Direct File program to accommodate over 30 million taxpayers, making it more accessible across 25 states. As stated by former IRS Commissioner Danny Werfel, the program this year is set to cover a broader range of tax situations than in previous years. Direct File presents a straightforward and free option for individuals looking to submit their returns efficiently.
In addition to Direct File, another valuable resource is the IRS Free File program. This initiative offers free guided tax preparation software for individuals with an adjusted gross income (AGI) of $84,000 or less. Evidence suggests that about 70% of taxpayers are eligible for this program; however, a disappointing reality remains—only a small fraction of those eligible take advantage of it. According to Tim Hugo, the executive director of the Free File Alliance, this underutilization signifies a significant opportunity for many filers to optimize their tax filing process.
Moreover, taxpayers in need of more personalized guidance may benefit from the Volunteer Income Tax Assistance (VITA) program. This IRS-affiliated service targets filers with an AGI of $67,000 or less, offering free assistance to ensure compliance and maximize deductions.
While the general deadline for federal tax filing looms at April 15, certain circumstances may warrant extensions. For example, victims of natural disasters, such as the recent wildfires in California, have been granted further time to file their returns and settle any taxes owed. The IRS has maintained a detailed breakdown of tax relief measures available to those impacted by federally declared disasters, which could provide much-needed relief to those eligible. In a move to facilitate support for disaster-stricken areas, Congress has extended tax relief provisions for particular victims through early 2025.
Despite the urge to file taxes quickly, it is advisable for filers to prioritize accuracy over speed. Certified public accountant Brian Long, a senior tax advisor at Wealth Enhancement in Minneapolis, emphasizes the importance of gathering all necessary tax forms before submitting a return. Failing to do so may result in the IRS flagging the submission for missing or inaccurate information, leading to processing delays. Utilizing the prior year’s tax return as a checklist can greatly enhance the accuracy of this year’s filing, Long suggests.
It is crucial to note that while many tax documents are dispatched in January, some may not arrive until mid-February or even later. Filers must remain vigilant and patient, ensuring they possess all relevant information before proceeding with their submissions.
Entering the 2024 tax season armed with knowledge about available resources and strategies can significantly improve both the filing experience and potential outcomes for taxpayers. Whether it be utilizing free filing services, understanding available extensions, or ensuring accurate documentation, forethought can translate into better financial security for countless individuals. As this tax season unfolds, filers are encouraged to take full advantage of all options, enabling them to approach the deadline with confidence and clarity.